Rolling Over Uncle Henry’s 401(k)

Seek professional advice prior to making any decsion regarding an inherited IRA. Some elections are irreversible.
NEW YORK - JULY 11: A pedestrian walks by a Dunkin' Donuts Inc. store in Midtown Manhattan on July 11, 2011 in the New York City. The parent company of Dunkin' Donuts, Dunkin' Brands Group Inc., plans to raise as much as $401 million before expenses through its initial public offering of 22.3 million shares, which are expected to price between $16 and $18. (Image credit: Getty Images via @daylife)

The Bottom Line

The IRA rollover privilege is a good deal for non-spousal qualified retirement plan beneficiaries who want to defer taxes. Remember, however, that you must set up a receiving IRA to accept the check from the retirement plan in a direct transfer. Then you must comply with the required minimum withdrawal rules to avoid the dreaded 50% penalty. If you inherit a significant amount of retirement plan money, consider hiring a good tax pro to help keep everything straight.